Mexico: Economic activity expands at fastest pace in nine months
June 25, 2013
In April, economic activity shot up 4.6% over the same month last year, according to the IGAE (Indicador Global de la Actividad Economica). The monthly expansion represents the fastest pace since July 2012 and contrasts the 1.7% decline observed in March. Moreover, the print overshot market expectations that had economic activity rising 3.6%.
According to the national statics office, the strong improvement observed in April was partly influenced by calendar effects, as the Easter holiday this year was celebrated in March while it was celebrated in April in 2012, thus leading to more working days. That said, the acceleration was broad-based, as all three major sub-categories that compose the index - agriculture, industry and services - improved markedly over the previous month.
On a sequential basis, however, economic activity plunged a seasonally adjusted 0.77% in April. The print contrasted the 0.16% increase recorded in March and marks the sharpest decline since December 2012.
Despite the strong annual reading, the trend continues to point downwards, with annual average growth in economic activity edging down from 3.0% in March to 2.9% in April.
LatinFocus panellists see the economy growing 3.5% this year, which is unchanged from last month's forecast. For next year, the panel expects growth to pick up to 3.9%.
Author: Ricardo Aceves, Senior Economist